U.S. House to Take Up 3 Percent Withholding Repeal

In a memorandum to House Republicans Monday, House Majority Leader Eric Cantor (R-Va.) put repeal of the 3 percent withholding mandate on the Republican Party’s legislative agenda this fall to provide tax relief for American employers.  The House is expected to consider the legislation as early as October. Cantor states in the memorandum that the House Republican leadership “will move quickly this fall to repeal this burdensome requirement and relieve construction contractors, medical providers, manufacturers, farmers, and many others providing goods and services under government contracts of the uncertainty the impending law is creating.” This week, AGC’s CEO Steve Sandherr will be submitting a request to the Internal Revenue Service (IRS) to testify at a public hearing on Sept. 12 on proposed regulations to change the effective date of the 3 percent withholding mandate to Jan. 1, 2013 for new and materially modified contracts, and to Jan.1, 2014 for all contracts - new and existing.  AGC will be expressing support for the implementation delay and opposition to imposing the 3 percent withholding mandate on existing contracts on Jan. 1, 2014. AGC will work closely with House Republican leadership as it prepares for debate on 3 percent withholding.  During the last days of the congressional recess, AGC urges its members and chapters to contact their senators and representatives to ask that they co-sponsor legislation to repeal the 3 percent withholding mandate when they return to Washington next week. To date, 221 representatives – a majority – have signed on in support of the 3 percent withholding repeal bill in the House, and there are 29 senators behind similar legislation in the U.S. Senate.  These numbers are expected to go up when Congress returns.  Many AGC members have continued the push for 3% cosponsoship during the August congressional recess and there have been a few commitments from members who want to support repeal. Use AGC’s 3 percent withholding website to find additional resources including talking points, IRS regulations, videos on the impact of this legislation, letters sent to Congress by AGC, and ways to become involved.  Please continue to make contact with your legislators and encourage your employees to do the same by using AGC’s Legislative Action Center. For a list of cosponsors in your state, please click here. For more information, please contact Karen Lapsevic at (202) 547-4733 or lapsevick@agc.org.